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Taking an Engineer Loan? Do it Right With These 7 Tips

For engineers with a pressing cash crunch, taking a customised engineer loan from a reputed lender can prove to be a one-stop solution. Such a loan is tailor-made, in keeping with both salaried and self-employed engineers’ personal as well as professional objectives – ranging from meeting working capital needs to purchasing the latest machinery to funding a medical emergency, renovating a residential property and consolidating all existing debts into a single payment

Read on to know the top 7 tips that can help seal an engineer loan:

Choose the lender carefully

Considering a host of objectives that an engineer has to meet, falling for the first lender that approaches with a product can be tempting. However, it is advisable to shop around for a while as only that can fetch engineers the best loan terms and offers. Carefully sifting through a list of lenders before zeroing-in on one will make sure the financial product is the best fit for an engineer’s unique personal and professional demands.

In addition to these, the product offers other benefits including an easy approval process with minimal documentation, money-in-bank within 24 hours of document verification, and no extra charges on partial pre-payment.

The loans also come with a Flexi Loan facility that allows one to withdraw funds as and when required from the approved loan limit with interest being charged only on the borrowed amount. This keeps EMIs low and helps in better management of finances.

Keep a check on credit score

Being an unsecured professional loan, one’s credit score will prove to be the make or break factor while getting the application approved. This is because lenders agree to a higher degree of risk while extending a collateral-free loan.

A credit score that’s on the lower side is the obvious red flag, indicating the borrower’s poor repayment track record and inability to pay the debt in full, on time. Therefore, it is advisable to keep track of the credit score.

A score of 750 and above, besides increasing the chances of approval, is likely to land the desired engineer loan amount with favourable interest rates and terms.

Compare interest rates

Interest rates on an engineer loan can often be on the higher side, considering it sanctions collateral-free funds. This is the reason engineers should think again before settling with a particular lender and hunt around for the best rates of interest that complement their objectives and fit with financial considerations.

Check criteria for eligibility

Before going ahead with the application procedure, it is imperative that engineers check whether they meet the eligibility criteria set by the lender. Income is one of the key considerations that lenders look into before approving the loan application.

This is because a stable monthly disposable income level is the primary indicator of a borrower’s financial viability, a factor that will determine whether he/she can pay off the loan in full within the repayment tenor.

Have a loan repayment plan ready

A typical loan term can entail different requirements and schedules. Repayment will comprise the interest on the outstanding amount as well as the principal (the amount pending after all periodic payments have been made).

Engineers with a ready repayment plan are likely to be considered viable prospects by the lenders, thus bettering the odds of getting the loan is approved.

Don’t approach multiple lenders

While shopping around for the best loan terms does make financial sense, engineers should exercise caution to make sure this habit doesn’t come back to hurt chances of approval.

Approaching multiple lenders with the loan application paints a credit hungry image of the borrower, denting lenders’ confidence in him/her. In case of a rejection, it is prudent to wait for six months before moving ahead with another application.

Read the fine print

No matter how seamless the application procedure has been, not reading the fine print before signing the dotted line can undo all the due diligence. Engineers should make sure all the terms and conditions are exactly the same as what was agreed upon while taking out the loan, in order to avoid potential misunderstanding and financial blunders.